Dunelm set to beat full year forecasts

Homewares retailer Dunelm said total revenue increased 21.2 per cent in the fourth quarter of the group's fiscal year, boosted by the unusually wet weather but cautioned that it expects consumer spending to remain under pressure.

Like-for-like sales grew 10.4% in the final quarter compared to 1.9% growth the same time a year earlier as consumers took to the shops to avoid the dreary weather conditions.

The group said it enjoyed strong footfall into stores and estimates that the net benefit to total revenues from the weather conditions was around £8m during the period.

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The board now expects that pre-tax profit for the year will be around £96m, ahead of current consensus expectations.

"We estimate that approximately £2.5m of this outperformance is attributable to the exceptional weather benefit over the second half of the financial year," it said in a statement.

Gross margin is expected to increase by approximately 20-30 basis points for the full financial year.

Dunelm, which opened a new superstore at Greenford in the quarter, now operates 115 superstores. The pipeline for new superstores remains strong, with a total of ten stores contractually committed, including its store in Cambridge.

The group had net cleared funds of £60m at 30 June 2012 compared to £31.6m a year earlier.

Chief Executive Nick Wharton commented: "The final quarter has seen further strong progress throughout the business, with robust like-for-like sales trends."

"Looking ahead, we anticipate that consumer spending will remain under pressure. Nevertheless, with ten further store openings committed, a strengthening multi-channel offering and with our unique proposition resonating with a wide range of customers, we remain confident in the future growth prospects for the business."

CJ